The Economist Case Against Brexit

As the Brexit referendum date approaches I want to discuss the economic implications of leaving the EU. As you know I am heartily in favour of remaining and in this blog I will focus on the economic arguments that support my view. The main basis for this rests on our access to the biggest single market in the world. The EU allows businesses in the UK to sell products and services to an international market of over 500 million people, without having to pay trade tariffs. For this reason our exports to the EU are almost the same as those to the rest of the world combined! If we were to leave the EU and be subjected to trade tariffs, this would hugely damage UK exporters resulting in job losses. Even if we made an agreement with the EU to trade freely with them (which is by no means guaranteed), there would be a period of uncertainty with export businesses reluctant to invest or take on new staff. Foreign companies would be much less inclined to invest in Britain. A knock on effect of a country´s exports decreasing is a fall in the value of the currency. The pound has already dropped somewhat just because of the referendum and in the event of Brexit a big fall in sterling would be almost inevitable. This would result in imported products becoming more expensive and the cost of living going up. It is not just the British economy that is at stake. The global economy could be adversely effected by Brexit and it’s not surprising that world leaders are queuing up to advise the UK to stay in.